BMO upgrades Verisk as valuation and AI fears misprice its moat

Investing.com -- BMO Capital Markets upgraded Verisk Analytics to Outperform, saying the data and analytics provider has been over-penalized by investor concerns around insurance pricing and generative AI, leaving the stock trading at an attractive entry point.

Verisk shares have lost roughly 14% value in last 5 days, which includes loss of 1% in Wednesday trading. Verisk now trades at about 16x EV to next-twelve-month adjusted EBITDA, a level last seen in 2017.

The company has de-rated more sharply than most information services peers since late summer 2025 as a broad Gen-AI bear case took hold. BMO sees as more limited disruption risk for the company.

One overhang has been slowing pricing growth in U.S. property and casualty insurance, which feeds into roughly 20 to 25% of Verisk’s revenue through contracts linked to net written premium growth. BMO said deceleration in that metric has weighed on the shares, but noted that pricing declines have begun to stabilize. More importantly, it said Verisk’s internal contract pricing, which typically runs at 300 to 400 basis points a year, matters more for revenue growth.

The firm also said fears of AI-driven disruption look overstated. Much of Verisk’s data is proprietary, including decades of insurance loss data by company and business line, which limits substitution risk. In addition, BMO highlighted a regulatory barrier, noting that black-box Gen-AI pricing models are generally not accepted by P&C regulators. While broader AI concerns have hit financial and legal data providers, BMO said those examples are less relevant to Verisk, even as the stock sold off sharply in the latest bout of AI-related anxiety.

BMO pointed to Verisk’s March 2026 investor day as a potential catalyst, when management is expected to outline its AI strategy.

The broker said the company’s insurance-focused exposure could help the stock act as a hedge in a risk-off market.

The firm also said noise around Verisk’s abandoned acquisition of AccuLynx may fade. While the reversal initially hurt sentiment, BMO said redeeming the associated debt should lower interest expense, and noted that software assets have fallen out of favor more broadly.

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